How to turn owner occupiers into tenants

Regulators are planning to tighten mortgage lending rules. But banks are already doing it themselves. And that’s likely to result in an increase in the number of people renting in the future.

I went on the Today Programme this morning to talk about the new Mortgage Market Review Proposals. Flick your eye down the listand you'll be amazed at the idea that anyone has to tell banks this stuff. You would have thought it would be pretty obvious that it might not be a good idea to lend people hundreds of thousands of pounds without checking they have a repayment plan beyond waiting for house prices to rise and selling the house.

And you would have thought that all mortgage affordability checks would take into account the fact that interest rates might rise and house prices fall. Still ,the fact that these measures might be introduced now will make not the slightest bit of difference to today's mortgage market. Why? Because lenders have temporarily at least learnt their lesson. Their huge shortage of capital and new understanding of the risks inherent in their business means that they do all this stuff already: they only lend to people who they are almost certain will pay back and they cover themselves by leaving a hefty margin for error in the form of low loan to values.

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Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.